Save Article

Pass-Throughs Show Strength
Despite Fears of Prepayments

Updated Aug. 2, 1996 5:16 p.m. ET

NEW YORK -- Mortgage-backed securities showed surprising strength Friday, despite fears that prepayments could be on the rise due to rallying Treasury prices.

Nonetheless, some mortgage analysts said prepayment fears were overblown, adding that mortgage-backed securities should have turned in even stronger gains. Prepayments, which occur when homeowners sell, refinance, or make larger-than-scheduled mortgage payments, erode the value...